SARS's new service charter may repair trust, but taxpayer bill of rights is needed

A service charter that will enable taxpayers to keep the South African Revenue Service (SARS) accountable on its service promises will soon be released to the public.

But there is still no word on the release of a taxpayer bill of rights proposed by the Davis tax committee in its final report on tax administration. Acting SARS commissioner Mark Kingon has committed the tax authority to releasing the long-overdue service charter on July 1. It has already been released internally to SARS staffers and the Office of the Tax Ombud.

SARS is reviewing comments received on the charter and this work should be completed soon.

Kingon says it is "a living document" and tweaks can be made if the need arises.

South African Institute of Tax Professionals vice-chairwoman of the tax administration committee, Elle-Sarah Rossato, says SARS launched a "basic" charter in 2007. It committed the agency to, among other things, answer 90% of its calls within 20 seconds, attend to 95% of visitors to a SARS office within 15 minutes of arrival, process VAT refunds within 21 days of receipt and income tax refunds within 30 days from the assessment date.

"The introduction of the electronic filing platform (eFiling) has assisted them tremendously with some of these promises, but failed them in a large portion of their service delivery," Rossato says.

The service charter will be a crucial barometer to ensure that taxpayers are treated administratively correctly and fairly. "Eventually it may even restore trust in the organisation," says Rossato, who is also associate tax director at PwC.

Office of the Tax Ombud CEO Eric Mkhawane says they have been pushing for the release of a service charter since the office was established in 2013.

A charter would ensure SARS’s service could be measured and taxpayers would be clear about what to expect.

"For us, it is long overdue, but it is great news that it is coming out. We have also given our input into the document. It might not be perfect and must still be refined," he says.

The ombud has also been vocal about its disappointment that a bill of rights for taxpayers has not yet been published.

"We have provided SARS with a draft document setting out the rights and obligations of taxpayers, which is not that much different from the Davis committee’s recommendations a long time ago."

The Davis committee emphasised the need for a bill of rights that is "enforceable and with legal effect", to guarantee the rights of taxpayers and ensure that SARS takes responsibility for its dealings with them.

They recommended that the ombud’s functions and powers be extended to enable it to act as a mediator in a dispute-resolution mechanism to solve differences between audited taxpayers and tax authorities.

It should also have the powers to adjudicate the disputes brought before the ombud, subject to review and appeal by the courts.

South African Institute of Tax Professionals head of tax policy Erika de Villiers questions whether SARS should be responsible for publishing a taxpayer bill of rights. She suggests the role should be performed by Treasury.

Rossato says in the current environment, both the charter and the bill of rights are necessary. The bill of rights is particularly needed so that taxpayers understand their rights, many of which are embodied in the Constitution.

The charter sets out the basic values and accountabilities of the public sector, the Tax Administration Act and administrative law in simple terms so SARS officials understand their obligations, and not only their vast powers.

SARS has set out five key outcomes for 2017-18, which include increased tax compliance, increased ease and fairness of doing business with SARS and increased public trust and credibility.

Rebuilding public trust and credibility will be key to achieving the other outcomes, says Rossato.

The Australian Taxation Office undertakes in its charter to treat taxpayers fairly and reasonably, treat them as being honest unless they act otherwise, help them get things right, explain the decisions the office makes about them and make it easier to comply and be accountable.

"We can only hope a taxpayer bill of rights will form part of the SARS officials’ key performance indicators when being appraised for their performance, and that it would resemble something similar to the Australian example," says Rossato.

WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.